Alberta Hansard — 23 November 1987, Afternoon sitting (14:30) (Legislature 21, Session 2)

19871123

Alberta — Debates (Hansard)

November 23, 1987 ALBERTA HANSARD 1981 LEGISLATIVE ASSEMBLY OF ALBERTA Title: Monday, November 23, 1987 2:30 p.m. Date: 87/11/23 [The House met at 2:30 p.m.] [Mr. Speaker in the Chair] MR. SPEAKER: Hon. members, before we commence with the opening prayer, I would have us follow the tradition of this House and pay our respects to three former members of this Chamber who have died since the House last met. First, Dr. Louis Wesley Heard, who was the Member for Edmonton-North East, first elected in the 14th Legislature, 1959. His last Legislature as served was the 16th.

In addition, Clinton Keith French, who was the Member for Hand Hills, then for Hand Hills-Acadia, then for Hanna-Oyen. His first Legislature was the 14th and served until the 17th Legislature. At one time, Keith French was also the mayor of Hanna. The last one is our colleague from this Chamber, from this Legislature, Henry Kroeger, who served this House as the Mem ber for Sedgewick-Coronation and laterally as the Member for Chinook, first elected in the 18th Legislature and died earlier this year.

Henry served as Minister of Transportation and laterally served as chairman of the Alberta Water Resources Commission. We remember these three who served their province so well. Rest eternal grant unto them, O Lord, and let light perpetual shine upon them. PRAYERS MR. SPEAKER: As Canadians and as Albertans we give thanks for the precious gifts of freedom and peace which we enjoy. As Members of this Legislative Assembly we rededicate our selves to the valued traditions of parliamentary democracy as a means of serving our province and our country. Amen.

Before the Chair attempts to recognize those who wish to speak in question period, the Chair would like to introduce to the House new Table officers. I ask you to welcome our new Clerk, Dr. David McNeil, and also our new Assistant Clerk, Karen South. In addition to that, hon. members, we have a new group of pages: Deanna Blais, Anthony Diamant, Sharon Foster, Roderick Frey, Dianne Makowecki, Carla Marciano, Cecelia Paolucci, and Regina Sebatier. I hope you would also welcome them to the service of the Assembly. head: INTRODUCTION OF VISITORS MR. McEACHERN: Mr.

Speaker, I wish to introduce to you and through you to the members of the Assembly, Anne Smart, the MLA for Saskatoon-Centre. Anne is in the Speaker's gallery, and I ask her to rise and receive the warm welcome of the Legislature. head: PRESENTING PETITIONS MR. SPEAKER: The Member for Edmonton-Gold Bar. MRS. HEWES: Thank you, Mr. Speaker.

I wish to present a petition on behalf of a number of investors in First Investors of Canada, Associated Investors of Canada, and Principal Group Ltd., who request that this Legislature set up a committee to de fine what would constitute government negligence and how compensation to investors like themselves could be determined and distributed. head: PRESENTING REPORTS BY STANDING AND SPECIAL COMMITTEES MR. OLDRING: Mr. Speaker, pursuant to Standing Order 52 the Standing Committee on the Alberta Heritage Savings Trust Fund Act is required to report to the Legislative Assembly at this time.

This will serve as an interim report to inform the Leg islative Assembly that the committee is presently undergoing its deliberations and expects to deliver a final report in the spring. head: NOTICES OF MOTIONS MR. HORSMAN: Mr. Speaker, I wish to give notice today of a resolution:

Be it resolved that the Legislative Assembly of Alberta support the government of Canada entering into a free trade agreement with the government of the United States of America. head: TABLING RETURNS AND REPORTS MR. ELZINGA: Mr. Speaker, I beg leave to table the 1986-87 annual report of the Department of Agriculture. I also beg leave to table the 1987 annual progress report for Farming for the Future. MR. McEACHERN: Mr. Speaker, I wish to file three copies of our party's background paper on the regulation of financial in stitutions in Alberta. MR. STEVENS: Mr.

Speaker, I wish to table the Glenbow- Alberta Institute 21st annual report for the year ended March 31, 1987. MR. JOHNSTON: I wish to file copies of correspondence and news releases between the government and the provincial Om budsman regarding his investigation into Principal Group. MR. SPEAKER: Member for Edmonton-Highlands. MS BARRETT: Thank you, Mr. Speaker. I'd like to file with the Assembly three copies of the Official Opposition report and recommendations following the public hearings that we held on the Constitutional Accord, 1987. head: INTRODUCTION OF SPECIAL GUESTS MR. PENGELLY: Mr.

Speaker, it's my pleasure to introduce to you and through you to members of the Assembly, 24 high school students from Innisfail. They are accompanied by their teachers, Mr. Bassi and Mr. Hansen, and their bus driver, John English. They are seated in the members' gallery, and I would

1982 ALBERTA HANSARD November 23, 1987 ask them to rise and receive the warm welcome of the Assembly. MR. SPEAKER: Member for Edmonton-Gold Bar, followed by St. Albert. MRS. HEWES: Thank you, Mr. Speaker. It's my privilege to day to introduce to you and through you to the members of the Assembly, 25 investors in First Investors and Associated Inves tors of Canada. They're here today in the members' gallery with the hope that the government will account for its perform ance and management in the failures of these companies and that they will compensate investors if found negligent. MR.

SPEAKER: Hon. member, that really is stretching the matter of introductions a bit. Nevertheless, would you invite your guests to stand and be recognized. MRS. HEWES: Thank you very much, Mr. Speaker. Can the Assembly acknowledge them. MR. SPEAKER: Member for St. Albert. MR. STRONG: Thank you, Mr. Speaker. It's indeed both an honour and a privilege for me today to introduce to you and through you to all Members of the Legislative Assembly, a group of 60 students from Sir Alexander MacKenzie school in the beautiful city of St. Albert. They are accompanied by two teachers, Mr.

Roger Bouthillier and Miss Jackie Veitch, and I would ask that they rise and receive the traditional warm wel come of the Assembly. head: ORAL QUESTION PERIOD Free Trade MR. MARTIN: Mr. Speaker, I'd like to direct the first question to the Premier, and I'm going to take the risk of being called a wimp because I want to talk about the Mulroney trade agreement. Mr. Speaker, it seems clear to almost everybody that the Mulroney trade agreement is threatening provincial powers. Specifically it's threatening provincial powers in the province setting the price of natural resources.

And why we would get into this -- this has been acknowledged by Mr. Lougheed and Mr. Masse. My question to the Premier: why has this Premier so en thusiastically supported the Mulroney trade agreement to the point of being a cheerleader when clearly provincial powers are being eroded, specifically setting the price for our own resource here in this province? MR. GETTY: Mr. Speaker, the negotiated free trade agreement between Canada and the United States, which is currently being placed into its final wording, in no way impinges on provincial jurisdiction at all. MR. MARTIN: Mr.

Speaker, this Premier is the last one in Canada that believes that then. My question to the Premier is specifically: will he advise Albertans whether our province can continue to set a price advantage for Alberta residents utilizing our own energy resources in this province? Yes or no? MR. GETTY: Absolutely yes, Mr. Speaker. MR. MARTIN: Well, Mr. Speaker, then would the Premier ex plain from the transcript of the agreement what it means when it says nondiscriminatory access to Canadian supplies. In other words, it guarantees Americans nondiscriminatory access to Canadian energy supplies.

Specifically does this not mean that we can't give our own consumers a break when it comes to prices? MR. GETTY: No, Mr. Speaker, it does not mean that. MR. MARTIN: Mr. Speaker, let me come back and put this clearly to this Premier and ask him.

From their own documents from the federal government, from the federal energy depart ment, from the trade negotiating office, they ask that specific question, and they're not sure about it, because they say "it is our expectation that the provinces will not take actions in compatible." If that's the case, I want to ask this Premier: has he made a deal with the federal government that we are going to give up our rights to control our prices? Is that what the Premier is saying to us? MR. GETTY: Mr.

Speaker, I repeat again that the trade ar rangement in no way -- in no way -- impacts on Alberta's own ership and management control of its resources that they handle for the people of the province. I understand the position of the hon. Leader of the Opposition, where he views that Canada is weak and that Canadians are unable to compete. But we have a great deal more confidence in this nation, and we will give Al bertans an incredible opportunity for building their future through this trade agreement. MRS. HEWES: Come on now, Mr. Premier, let's tell the As sembly how Alberta can . . . MR. SPEAKER: Order.

Address the Chair. It's not a conver sation back and forth. MRS. HEWES: I addressed you, Mr. Speaker. . . . maintain control over the depletion of its oil and gas in light of increased demand from the U.S. How are we going to be able to maintain that control? MR. GETTY: Mr. Speaker, there is no way that any agreement over trade can in any possible way change the Canadian Con stitution. I mean, this is nonsense. They're dealing in fear, try ing to disturb people with stories of fear. Alberta owns, manages, and controls its resources. Nothing has been changed. Principal Group Inquiries MR.

MARTIN: I'll come back. The second question is to the hon. Premier, who seems content to sell us down the river and not answer those questions. But I'll try another tack, Mr. Speaker. Mr. Speaker, thousands of Albertans want the Premier, not the courts and not the Ombudsman, to address some very sig nificant questions dealing with financial industries in this province. My question very specifically to this Premier: will he take the opportunity to tell the Assembly what the government knew about the collapse of the Principal Group, when it knew it, and why it allowed Albertans' savings to be placed at risk?

November 23, 1987 ALBERTA HANSARD 1983 MR. GETTY: Mr. Speaker, it's precisely to make sure that all of those matters are made available to the public that we have two full investigations into the entire matter of the financial in stitutions which went broke. MR. MARTIN: Mr. Speaker, I was asking the Premier what he was prepared to do here in the Legislature, not hide behind the Ombudsman and hide behind a limited inquiry. If the Premier really wants the truth to come to the front, why didn't they put it under the right Act?

Why wasn't it placed under the Public In quiries Act instead of the Business Corporations Act? MR. GETTY: Mr. Speaker, I should say that the government looked at the possibility of putting it under the Public Inquiries Act, but we wanted to help these investors more than that. We wanted them to have time to turn their securities into the great est value possible, and many of those securities were in fact mortgages and real estate. To have gone into the quick bankruptcy and the public inquiry as advocated by the opposi tion would have exactly hurt the investors, not helped them. Instead, Mr.

Speaker, what the government has done is ar range a full court-ordered public investigation, requested by the government, paid for by the government. We have arranged for an investors' committee to represent the Principal Group in vestors, made up of investors themselves and headed by one of the most respected men of judgment in this province, former Chief Justice Milvain. He is leading the investors' committee. We've also had the investors pick the investigator, Mr. Code, a fine choice.

We also provided the investors with special, inde pendent counsel to represent them, both FIC and AIC, paid for by the government. The best legal minds they could get. We've also ended up ordering the Ombudsman to investigate the matter fully as well. Then we are also paying for the receivers who are actually handling the plan for the investors. So we are paying for the investigation, paying for the in vestors' committee, paying for Mr.

Code, paying for the special independent counsel, paying the Ombudsman's costs, of course, paying for the receivers' costs: millions and millions and mil lions of dollars to help the investors. MR. MARTIN: Mr. Speaker, what a swell guy, eh? All the backbenchers love you, no doubt about it. But the investors don't. I want to come back, Mr. Speaker, because clearly all those answers have nothing to do with the question. If we really wanted the answer to it, it would have been under the inquiries Act. That's why we have an inquiries Act, Mr. Speaker. And, Mr.

Speaker, the Ombudsman has asked this govern ment to . . . MR. SPEAKER: Order please. Order please. Could we have a more succinct supplementary, please. MR. MARTIN: Yes, Mr. Speaker, it's hard to answer all the questions back. The Ombudsman, who the Premier just talked about, has asked the government to expand the Code inquiry so that they can look into the government's role. Why did this government refuse to do that? MR. GETTY: Because, Mr. Speaker, the Code inquiry is fully able to look into the government's role in the broadest possible way. MR. MARTIN: Mr. Speaker, that's such nonsense.

If the Busi ness Corporations Act can do all this, why do we even have a Public Inquiries Act? Would the Premier answer that question then? MR. SPEAKER: It's a matter of trying to solicit a legal opinion with respect to legislation. This is not the place to be doing it; it's an

interpretation of laws. MR. R. SPEAKER: Mr. Speaker, to the Premier. He has indi cated, in terms of the results of the hearings going on, that in vestors could be compensated for their losses in this Principal affair if the province is found at fault. Could the Premier indi cate whether the terms of that decision could be enunciated at this time and clarified? MR. SPEAKER: With respect, Mr. Premier. There's a diffi culty in this whole line of questioning. The Chair has listened carefully and the fact that the question has been crafted along the lines that it has has indeed been in order.

This particular supplementary, however, takes us into a different area. It's at this stage of the proceedings that I would like to share a few comments with the House, because it's very necessary to the procedure that will develop, I think not only today but in subse quent days, with regard to the whole operation of the House. First off, the Chair appreciates that this matter presents a number of concerns in all comers of the House, to say nothing with respect to the province and beyond.

However, because of the complexity and the scope of the case and our stringent Standing Orders, particularly Standing Order 23(g)(

i) and (ii), the Chair is in a very interesting position. The Chair would remind members that as Beauchesne points out, the main responsibility with regards to the sub judice con vention rests upon, firstly, the member who asked the question, to determine whether or not the matter is indeed before the courts, or the question of the supplementary, that it involves matters before the courts or before, as pointed out in our other Standing Order 23, the matter of a quasi-judicial or judicial committee. So the first obligation is upon the member who asked the question.

Secondly, if the question has been asked with great skill and care and if the minister is to respond, it's up to the minister also to be able to interpret and to declare to the House whether the matter is sub judice. It is not the number one functioning of the Chair to become some kind of legal expert with regard to all the court cases that are going on within the land. All members are aware of the practice of this House which seeks to apply rules voluntarily to matters placed before the courts or quasi-judicial boards. This process ensures that noth ing prejudices the interests of the litigant.

As members should be aware, there are innumerable private court actions related to Principal trust and to its subsidiary companies already being entertained by the courts. In addition, the Ombudsman, as men tioned, has initiated an inquiry as directed by ministerial order by the government under

section 11(5) of the Ombudsman Act, and Mr. William Code has been appointed by the Alberta Court of Queen's Bench to conduct an inquiry. The Chair would ask the indulgence of all members of the House should it not be prepared to rule immediately on the order of any question touching on the Principal matter. So the Chair does suggest the following: that an alternative method of pursu ing this particular line of questioning would be to submit written questions for the Order Paper. This procedure follows a long-

1984 ALBERTA HANSARD November 23, 1987 standing parliamentary tradition and m fact was the basis from which Oral Question Period originally evolved. The Chair sin cerely hopes that members will consider pursuing this avenue of posing questions on this very complex matter. And so it would be that if questions are raised and if the Chair is uncertain as to the admissibility of the question during question period, then the Chair would have to utter a phrase similar to this: I will reserve judgment on the admissibility of that question and will report to the House in due course.

So that would mean it would happen on another occasion. And I . . . MR. WRIGHT: A point of order, Mr. Speaker. May I ask . . . MR. SPEAKER: Order please. MR. R. SPEAKER: Mr. Speaker, in light of your comments, I'd like to rephrase my supplementary to the Premier, if that's advisable. MR. SPEAKER: I apologize to a member with such long stand ing in the House, but I'm afraid that the question, once asked, then fails till the next time. Edmonton-Gold Bar, followed . . . MR. WRIGHT: May I just ask . . . MR. SPEAKER: Order please, hon. member. Thank you.

Edmonton-Gold Bar, followed by Edmonton-Strathcona, on a point of order? MR. WRIGHT: Yes, at the conclusion of question period, if you please, Mr. Speaker. MRS. HEWES: Am I on. Mr. Speaker? MR. SPEAKER: If it's a question. MRS. HEWES: Mr. Speaker, let me try this one on for size then. Is the Premier really insisting to Albertans that this in quiry system in any way constitutes a full public inquiry with power to examine the government's role, as it would under the Public Inquiries Act? MR. GETTY: Yes, Mr. Speaker. MR. HYLAND: Mr. Speaker, a supplementary question to the Premier.

I wonder if in the design of this inquiry the govern ment considered the call of Executive Council as well as offi cials before the inquiry. MR. GETTY: Yes, Mr. Speaker. As a matter of fact, I have asked Her Honour the Lieutenant Governor if she would waive the details and the impact of the oath of secrecy that Executive Council takes when they are sworn in as members of cabinet in order to be able to testify fully in the case to anyone's satisfac tion. She has waived the oath of secrecy, and on this matter all members of the Executive Council are fully available. Financial Industry MRS. HEWES: Mr.

Speaker, may I request, in the absence of the leader of the Liberal Party, who happens to be down in Chinook today, that the first speaker be taken by the Member for Edmonton-Meadowlark? MR. SPEAKER: Member for Edmonton-Meadowlark. MR. MITCHELL: Thank you. [interjections] MR. SPEAKER: Order please. Edmonton-Meadowlark. MR. MITCHELL: Thank you, Mr. Speaker. My question con cerns the financial industry, but more generally than Principal Group.

While individual companies within a group of financial companies may have a legal independence, lack of confidence in one may lead to the failure of others and the erosion of their market value. This market value can be used to support inves tors in the failed member of the given group. Government must have the authority to deal with the group as a whole . . . SOME HON. MEMBERS: Question. MR. MITCHELL: Three sentences. . . . and not solely with its independent parts.

To the Treasurer: is the minister cognizant of the domino effect of fail ures within a group of financial institutions, the kinds of groups that operate today still in Alberta? MR. JOHNSTON: Mr. Speaker, there is a variety of regimes under which that answer could be applied. Obviously, I know the member is going to lead up to something in his question here, because he wouldn't leave that kind of an answer hanging out there. Obviously, Mr.

Speaker, it's well known that there's a domino effect, and it's for that reason that the province of Al berta is currently reviewing its legislation here in the province with respect to trust companies, with respect to credit unions in particular. In that context we'll be looking to see if it's in fact possible to ensure that the uniformity of regulations can be ap plied to protect against the so-called commercial linkages which exist in some cases, where in fact the problems of self-dealing occur.

As the member knows, these questions of self-dealing are the ones which have triggered a great deal of the debate across Canada, and we, along with others, will be presenting this legislation to the Assembly sometime in 1988. I'm sure there'll be an ample opportunity to listen to the member's comments as to how our legislation is crafted, and I would be more than will ing to hear his views on this issue. MR. MITCHELL: Mr. Speaker, to the Treasurer.

In the proc ess of considering legislation, presumably for the spring, has the Treasurer considered steps that could be taken to move in and manage an entire group of companies, to sustain the value in the good parts of those companies so that they could be sold and the value could be taken to support investors in weaker parts of the company? MR. JOHNSTON: Well, Mr. Speaker, that's a fairly iffy ques tion, based on a series of speculations which I can't comment on. Obviously, from time to time the province has made deci sions with respect to a variety of private-sector operations.

In the case of North West Trust, for example, which is a matter of record, we did do everything we could to stabilize that financial institution in this province. In seeking the assistance of the fed eral government, who in fact provided the entire financial assis tance package, we did in fact find some way to make it work. But to take a generalized case would be improper, and my com ments in that context would probably be improper as well.

November 23, 1987 ALBERTA HANSARD 1985 MR. MITCHELL: Is the minister aware of U.S. bankruptcy regulations which permit a government to move much earlier into a financial institution, manage it, sustain its value, possibly find that value realized in public markets, so that the money could be used to support investors who have lost money? MR. JOHNSTON: Well, Mr. Speaker, the gentleman has asked me to give an opinion on American jurisdiction, which of course is inappropriate. MR.

MITCHELL: In light of your commitment to be consider ing new trust company legislation, could the minister please ex plain to the Legislature how it is conceivably possible that he could come up with adequate legislation for the trust/financial industry in this province without undertaking any review of the demise of this financial industry from 1981 to 1987? He is only reviewing Principal Group, and the entire traditional financial industry has fundamentally failed in this province. MR. JOHNSTON: Mr. Speaker, this government is not as shortsighted as the Member for Edmonton-Meadowlark, I can assure you.

We will take into our legislation a variety of inputs. You must remember that this issue with respect to reforming the trust company legislation is not a new issue; it's an issue which has been ongoing in this province for some time. We have seen several policy questions debated at the initiative of the federal government. We've had the green paper. We've had two pieces of legislation introduced by Mr. Hockin, the undersecretary of state for Finance. Moreover, it should be well-known that the Estey commission was put together by the federal government to review the failures of two large banks in this province.

So, Mr. Speaker, it isn't that we're focusing entirely on the outcome of the Code inquiry, yet it should be known that these items will be factored in. But this is a long, emerging, evolving process, which, notwithstanding the Principal Group affair, would have been reflected in our legislation in the spring of 1988. There is now some urgency, I think, to ensure that it takes place in 1988. Moreover, we will have the additional benefit of any recommendations which may come from Mr. Code's inquiry. MR. SPEAKER: Member for Edmonton-Highlands, a supplementary. MS BARRETT: Yes.

A supplementary question on this broad issue, Mr. Speaker. I wonder if the Consumer and Corporate Affairs minister would indicate what mechanism, if any, the Al berta government uses to prevent corporations which acquire personal income tax services from rifling through the personal income taxes of individuals within those companies for the sole purpose of looking for new business. MR. SPEAKER: The Chair has great difficulty understanding that that is related to the original line of questions. The Chair recognizes the leader of the Representative caucus. Western Diversification MR. R. SPEAKER: Mr.

Speaker, my question is to the Premier, and it's with regards to western diversification, that we're wait ing very patiently to happen here in Alberta. The federal gov ernment indicated there was going to be a budget of $1.2 billion available in the next five years. The Premier has said that we can compete in Alberta. Has the federal government made a commitment at this time to leave the ground rules rather loose in terms of the distribution of the moneys to the western provinces, or are there fixed ground rules being established to divide it equally amongst the four provinces? MR. GETTY: Mr.

Speaker, the Minister of Economic Develop ment and Trade handles the western economic diversification opportunities, and he has liaison responsibilities with the hon. Mr. McKnight of the federal government. I would ask him to respond to that question. MR. SHABEN: Mr. Speaker, I had the opportunity to meet with the Hon. Bill McKnight on Friday last to discuss progress with respect to the implementation of western diversification initiatives. Mr.

McKnight advised me that to date the federal government has received some 900 applications from companies under this program, and nearly 400 of the applications origi nated from companies that have an Alberta involvement. The decision-making process is one that involves the West- em Diversification Office. The federal minister has invited comment and suggestions and recommendations from the provincial government with respect to those applications that impact upon Alberta. We are providing that sort of advice to the federal government. MR. R. SPEAKER: Mr. Speaker, a supplementary.

Could the minister indicate when the first installment of some $105 mil lion will be made available in that process? Is it going to be this current calendar year, or are we waiting until 1988 before the actual dollars will impact on Alberta? MR. SHABEN: Mr. Speaker, I don't think I can respond pre cisely to that question, except to indicate to the hon. member that a significant number of companies have received offers of support from the Western Diversification Office and negotiation is going on between the WD office and the companies at the moment. MR. R. SPEAKER: Mr. Speaker, a supplementary.

Could the minister assure, in this process of application approval, that the applications will be approved by the western office without any federal intervention? I guess maybe in terms of the minister's responsibilities, has he assured himself that in that process the decisions will be made here in western Canada rather than in Ottawa? MR. SHABEN: Mr. Speaker, I don't know how I could do that. I would suspect that would be a question that should be put to a federal minister.

For the part of the Alberta government, we will endeavour to and will assure that we make the case con stantly for Alberta with respect to applications by Alberta com panies for support under that program. But it would be difficult for me to respond to that question. MR. R. SPEAKER: Mr. Speaker, a final supplementary to the minister. The Atlantic Canada Opportunities Agency has a public/private advisory committee that looks at items such as that. In the discussions with the federal minister has the minis ter made any progress on implementing an agency such as that that may be more western representative?

1986 ALBERTA HANSARD November 23, 1987 MR. SHABEN: A part of our discussion on Friday. Mr. Speaker, the discussion I had with the federal minister, was to examine further ways in which the provincial government could have ongoing input and advice to the federal minister and the western diversification initiative. We're pursuing a variety of options, including the one suggested by the hon. member. MR. MITCHELL: Mr. Speaker, this is a supplementary to the Minister of Economic Development and Trade.

Could he please confirm whether in his discussions with the Western Diver sification Office he has been able to determine whether this of fice will be providing money to Albertans with good entrepreneurial ideas but not necessarily with the traditional track record or the traditional assets that might be needed as col lateral to get capital from banks and other kinds of financial institutions? Will this office be filling that important gap: small businesses with good ideas that can't seem to be get started any other way? MR. SPEAKER: Some of us can't seem to get stopped on the supplementary. Mr. Minister. MR.

SHABEN: Mr. Speaker, in reviewing the applications from Alberta, there is a wide-ranging type of applicant, includ ing small businesses. Some are start-up businesses; some are more mature. So we do not control the nature of the applica tions because Albertans are encouraged to get involved in ac cessing the program. But my understanding is that the program is not limited to a particular area of applicant. MR. SPEAKER: The Member for Grande Prairie, followed by the Member for Edmonton-Kingsway. Trapping Regulations DR. ELLIOTT: Thank you, Mr. Speaker.

My question is to the Minister of Forestry, Lands and Wildlife. The topic is to do with trapping. I was wondering: is it true there's no trapping of lynx in the four western provinces at this time? MR. FJORDBOTTEN: No, Mr. Speaker, it's not. There is trapping of lynx in the four western provinces. There are two provinces -- I believe Saskatchewan and Ontario -- that have no trapping. Manitoba, I believe, has some limited trapping. In Alberta there are only two areas where there is trapping of lynx; the other areas are closed. DR. ELLIOTT: A supplementary. Mr. Speaker. What is the limit then on lynx in Alberta?

MR. FJORDBOTTEN: The areas that are open, Mr. Speaker: there is one lynx allowed to be taken from each of those areas. DR. ELLIOTT: Mr. Speaker, are there special concessions with respect to the native community, or was the native community involved in establishing those rates? MR. FJORDBOTTEN: No, Mr. Speaker, there was no special consideration per se. I did meet with the Indian Association a little over a week ago and included at that meeting were the na tive trappers as well as the Metis Association.

There were some concerns raised, and we're working with them to try and al leviate those concerns but really no special consideration over and above anyone else. There was some concern raised in the north that there were some residents that weren't aware of the regulations, so we have taken whatever steps we could to make sure that communication was taken care of. DR. ELLIOTT: A supplementary, Mr. Speaker. What are the consequences then if more than one lynx has been caught at this time? MR. FJORDBOTTEN: Well. Mr. Speaker, if they were taken and they were aware of the rules, it shouldn't have been taken.

That animal has to be turned in. Each case will be looked at individually considering the lateness of the applications. The onus of proof will be on the department. We certainly intend to do all we can to be considerate of the trappers' needs, recogniz ing the law is in place and must be adhered to. MR. SPEAKER: The Member for Edmonton-Kingsway, fol lowed by the Member for Calgary-Millican. Principal Group Inquiries (continued) MR. McEACHERN: Thank you, Mr. Speaker. My questions are to the Treasurer.

The investors in First Investors and Asso ciated Investors have received only 30 percent return on their investments in the liquidation process so far. Would the govern ment reimburse the contract holders a further 35 percent before Christmas through the Treasury Branch system in exchange for the right to collect that money from the liquidators themselves? MR. SPEAKER: Hon. member, that one is clearly sub judice. It affects the matters of the litigants. MR. McEACHERN: Mr.

Speaker, it's about government policy, and the courts are not considering this question in any way. shape, or form as far as I know at this stage. MR. JOHNSTON: Mr. Speaker, you should as a matter of re cord know that any distribution of the corpus of the FIC/AIC can only be done by the order of the court upon application by the receiver. Therefore, for me to give any kind of a comment at all would in fact prejudice the receiver's role. MR. McEACHERN: Mr. Speaker, this matter is not before the courts. The liquidation . . . MR. SPEAKER: Order please, hon. member.

Perhaps just get on with the supplementary question. MR. McEACHERN: Well, does the Treasurer think it's fair then that these seniors should have to wait for a three- or four- year, or however long it takes, process to get the next 35 percent of their investment? MR. JOHNSTON: Mr. Speaker. I can only say that that ques tion of fairness is one which can be debated.

Certainly we are attempting everything on behalf of the government to ensure that fairness is implicit in this process, and that is why we agreed with the proceeding of the federal jurisdiction, the fed eral legislation, the Companies' Creditors Arrangement Act, where in fact all the precepts of fairness can be incorporated by having investors of those two companies involved in the plan of

November 23, 1987 ALBERTA HANSARD 1987 action. That plan of action has been approved by the investors, and by a very large majority they agreed to the process and to the [inaudible] of the plan as outlined by the receiver. MR. McEACHERN: Mr. Speaker. I'm not questioning the plan of action as it's proceeding; I'm merely wondering if the gov ernment would help out the seniors who are going to have wait for that lengthy process in the meantime, and then the govern ment would accept that money when and if the liquidation makes it available. MR. JOHNSTON: Again, Mr. Speaker.

I don't want to get in volved in either prejudging the outcome of the process or in fact the order of the court, but I have been fairly carefully monitor ing the requests by the investors -- investor group limited. My recent information from the liquidator himself was that this 30 percent liquidation in fact eliminated much of the concern about the shortage of cash flow. MR. McEACHERN: In any case, Mr. Speaker, even if the in vestors do get another 35 percent out of the liquidation process, it's going to take a certain amount of time. But that still leaves them 35 percent short.

I'm wondering if the government would consider reimbursing the depositors the final 35 percent because of the government's failure to adequately enforce its own regu lations under the Investment Contracts Act. MR. SPEAKER: There's no need to comment on that. There's no need to comment. MR. MITCHELL: Mr. Speaker, could the minister please clarify how it is that the investors could have properly been able to judge the offer of the liquidator, 35 or 30 percent now and the rest later, without seeing the proposal which my hon. colleague from Edmonton-Kingsway has just proposed?

You've said that they made the decision, but it wasn't in light of that proposal. Could you please clarify that? MR. JOHNSTON: Mr. Speaker, only as a matter of process can I clarify what happened. I can report that Coopers & Lybrand provided a submission to the Court of Queen's Bench of Alberta -- I think it was on August 30, '87 -- and then subsequently circulated to all investors in the two companies a plan of action asking for a vote, an actual response. That actual response came in. I haven't got the statistics, but I can say that there was an overwhelming agreement to the plan of action.

Presumably if they had any other set of options, they would have presented those. I can only deal with the facts that were presented. Colonel Belcher Hospital MR. SHRAKE: Mr. Speaker, in 1980 the province assumed the responsibility for the Colonel Belcher hospital in the city of Calgary from the federal government. This hospital is a veterans' hospital. I think at that time we the province made a commitment to our veterans, the men and women who had fought the wars for us, to guarantee active treatment beds in Calgary for them.

I understand that at this time there are plans coming out of district 93 to make changes. My question is to the Minister of Hospitals and Medical Care. Are we going to retain our guarantee, our promise to our veterans, that in the city of Calgary they will be guaranteed active treatment beds? MR. M. MOORE: Mr.

Speaker, my understanding of the pro posal which has been put forward by the Calgary District Hospi tal Group, which would involve a world-class geriatric care facility at Colonel Belcher, is that the care that would then be provided by the Calgary District Hospital Group would far ex ceed the requirements of the agreement between our government and the government of Canada insofar as the health of veterans is concerned. MR. SHRAKE: Supplementary question, Mr. Speaker. The veterans' organizations in Calgary and other regions of the prov ince at this point are very concerned.

I wonder if we are going to make an attempt to communicate to them and let them know that we are honouring the promise we made to them and also find out what their concerns are and see, before any final plans are made on the Colonel Belcher, if we can accommodate their wishes. MR. M. MOORE: Well, first of all, Mr. Speaker, the plans with respect to the operation of the Colonel Belcher hospital in con nection with the Holy Cross hospital and the Rockyview hospi tal in Calgary are being made not by this government but by the board of the Calgary District Hospital Group.

I have been ap prised throughout their planning of the nature of the plans they have, and in every case the needs and concerns of the veterans as well as other seniors in the Calgary region have been taken into consideration. I am fully confident that the board will be providing services to veterans and others there that far exceed any requirement of the agreement between the government of Canada and the government of Alberta. It will be my intention to meet, however, with the veterans' groups at the earliest possible opportunity to review whatever concerns they do have. But I just want to reiterate, Mr.

Speaker, that the Calgary District Hospital Group are the ones that are really making the decisions with respect to the kind of care that is going to be provided. REV. ROBERTS: Mr. Speaker, to the minister: in the conver sion of the Colonel Belcher to a world-class geriatric centre, what assurance does the minister have that they're able to recruit a department head for the department of geriatrics? It's taken the Youville a year and a half to recruit a geriatrician here. Is there not in fact a shortage of the supply of geriatricians to run this new facility, the Colonel Belcher, in Calgary? MR. M. MOORE: Mr.

Speaker, the supply of recognized geriatricians, in terms of those who have actually qualified un der the Canadian standards that now exist, is very limited. My understanding a few months ago was that there were only some 18 geriatricians actually licensed to practise in Canada. Most of those who term themselves as geriatricians and practise in this province in fact did not have the qualifications that are outlined by that organization.

But I would additionally like to point out that there are many, many very fine and able physicians in this province who have specialized in internal medicine for senior citizens that are doing a very adequate job of providing geriatric care, and they don't necessarily have that tag behind their name. That's the case in other provinces I have visited as well.

We would expect that the Calgary District Hospital Group would be able to attract an additional number of geriatricians besides what they pres ently have or doctors very well experienced in geriatric care even though they may not have the individual title attached to

1988 ALBERTA HANSARD November 23, 1987 their names. MR. SPEAKER: Edmonton-Gold Bar. MRS. HEWES: Thank you. Mr. Speaker. It appears from the minister's answers on this one that the hospital board is in fact carrying the ball in initiating this procedure. May I ask the min ister then: regarding the transfer agreement of '79, which indi cates that the province and the government of Canada must agree before such a move can take place, has in fact the provin cial government agreed to this, as that transfer agreement indicates? MR. M. MOORE: Mr.

Speaker, the hon. member must not be reading the agreement very accurately. There is nothing in the agreement between the government of Canada -- the federal government -- that requires federal government approval for the Calgary District Hospital Group to develop a world-class geriatric care centre at the Colonel Belcher. The only thing in the agreement requires the provision of a certain number of acute care beds for veterans in that area and some other matters that certainly will be lived up to. There's no question about that.

But we're not talking about a change with respect to eliminating services altogether for veterans; we're talking about an increased service. So I've had great difficulty in understand ing those who suggest there may be some breach of contract on our behalf with respect to the agreement made with the federal government. Certainly there will not be. MR. SPEAKER: The Member for Calgary-Mountain View, followed by Edmonton-Belmont. Principal Group Inquiries (continued) MR. HAWKESWORTH: Thank you, Mr. Speaker. My ques tion is to the Premier.

Earlier this year the Premier reportedly made a promise to the leaders of the Principal Investors Protec tion Association regarding the conditions under which his gov ernment would accept liability for their losses and compensate contract holders in First Investors and Associated Investors for their losses. I'd like to ask him about his comments reported in the press. Will the Premier clarify for the Assembly the condi tions under which his government is prepared to reimburse the losses of various contract holders? MR. SPEAKER: Hon. member, the

preamble as well as the question is out of order. MR. HAWKESWORTH: Mr. Speaker. I'd ask you to give your reasons under our Standing Orders. Order 13(2). MR. MARTIN: Mr. Speaker, under Standing Order 13(2) the member has a right to hear from the Chair why he's ruling that out of order. MR. SPEAKER: The Chair doesn't disagree with that. The Chair was indicating that the Chair hadn't heard what was mumbled by the Member for Calgary-Mountain View. It will be dealt with at the end of question period, but it seems to fit in with the guidelines that I was sharing with the House earlier.

Perhaps we could look at a supplementary, but I'm doubtful if . . . MR. HAWKESWORTH: Mr. Speaker, I'd like to ask the Pre mier to explain to this Assembly the conditions under which his government might be prepared to reimburse the losses of vari ous contract holders. MR. GETTY: Well, Mr. Speaker, if you are allowing me to reply, I would say that the government will -- if there is negligence, any proof that the government has in some way damaged the investors, then the government would make up that damage, no question about it. MR. HAWKESWORTH: Thank you, Mr. Speaker.

Will the Premier confirm that Justice Berger has ruled that the mandate of the Code inquiry could not be expanded to investigate the role of the provincial government to determine its potential liability in this? MR. SPEAKER: This question is clearly out of order. We're dealing with a legal opinion, and that's out of order according to Beauchesne. What's the next crack? MR. HAWKESWORTH: I'm just asking the Premier if he could confirm that. Mr.

Speaker, given that the Code inquiry does not have a mandate to determine government responsibility, how will the contract holders establish provincial government liability in this situation? MR. GETTY: Mr. Speaker, both the investigations by the Om budsman and by Mr. Code will be able to give us indications of the government's regulatory process and whether it failed or not. MR. SPEAKER: That's correct. [interjections] All the sup plementaries and questions have been used up by Calgary- Mountain View. MR. MITCHELL: To the Premier, Mr. Speaker, a supple mentary.

Can the Premier please tell us what in his mind would constitute proven negligence or proven liability on the govern ment's

part in this particular . . . MR. SPEAKER: Hon. member, that is clearly out of order. The Chair recognizes Edmonton-Belmont, followed by Calgary-McCall. Education Funding MR. SIGURDSON: Well, thank you, Mr. Speaker. I'll deal with something that has principals as well, and that's the school system, not financial institutions. Cutbacks in education have cost approximately 1.000 Al berta teachers their jobs. They've caused classroom size to in crease to levels where children, especially at the primary level of education, may suffer due to the lack of individual attention available to them by their teachers.

In fact, one might argue that they've done some damage politically, to the point where the Premier has promised there will be no further cuts to education in next year's budget. To the minister: when the Premier made his commitment to all Albertans, did he take into account the cuts that inflation will inflict upon the commitment? Thus, will there be an actual in crease in dollars for the next fiscal year?

November 23, 1987 ALBERTA HANSARD 1989 MRS. BETKOWSKI: Mr. Speaker, I'm pleased that the Mem ber for Edmonton-Belmont is agreeing with the government that one of the highest priorities we have as a government is our edu cation system. I know he will look forward to the estimates of the Department of Education when they're tabled after the Treasurer tables his budget, presumably close to the end of March. MR.

SIGURDSON: Perhaps a bit too late, but what with infla tion up, enrollment up, fewer teachers actually teaching, and educational funding down, how many students per teacher is the minister prepared to see packed into classrooms in our schools? MRS. BETKOWSKI: Mr. Speaker, I don't believe it is in the interest of the province to define how school systems should best deliver the program. That's why we have locally elected school boards in this province: in order that they can look at the flexibility within our school system to deliver the program to their students in the best way they see fit. MR.

SIGURDSON: Well, perhaps we ought to put an amplification system outside, so children can just show up . . . MR. SPEAKER: Order please. The time for question period has expired. Might we have unanimous consent to complete this set of questions? HON. MEMBERS: Agreed. MR. SPEAKER: Opposed? Hon. member. MR. SIGURDSON: Thank you, Mr. Speaker. Can the minister assure the Assembly that children are receiving the best possible quality education in classes that have one teacher teaching 30- plus students in three or more subjects? MRS. BETKOWSKI: Mr.

Speaker, the focus of this govern ment on the education of students is in place in terms of our cur riculum, in place in our financing system, and to be in place with respect to our new legislated model. Certainly it is to the interests of students that we are looking in the future.

And our priority as a government on education, which our Premier so effectively spoke to in Lethbridge on September 29, was a prior ity not on preserving the past nor a priority on maintaining the status quo but rather a priority on looking ahead to the future and equipping our students to be the best they possibly can in the 21st century. MR. SIGURDSON: Mr.

Speaker, I'm certainly glad that the minister is prepared to look into the future, because along with funding cuts to education this government has allowed its per centage share of funding to drop from over 85 percent less than a decade ago to just over 60 percent today. Does the minister propose to reverse that trend? This is, after all, something that is into the future. MRS. BETKOWSKI: Well, Mr.

Speaker, that is a fascinating question, and of course I read from a news release by the Offi cial Opposition, the New Democrats, room 205 Legislature Building, in October about the issue of funding education and saying that legislation is an attack on local autonomy. In fact, I think there's a far more fundamental issue at stake in education right now with respect to financing, and that is ensuring that the distribution of wealth is not the quality giver in education.

Therefore, the paper which the province has put out with respect to funding education and promoting a debate within the commu nity is a very fundamental, important one. MR. SPEAKER: Member for Edmonton-Gold Bar. MRS. HEWES: Thank you, Mr. Speaker. Glad to hear from the minister that we're leaving control with the school boards. That's not the way most of them read the new School Act. Mr. Speaker, one of the groups that has suffered grievously under the cuts regardless of concerned school boards is those who need special education.

Will the minister now agree that our call for provincewide access to special needs education was not a bad idea, as was suggested by the minister last spring? MRS. BETKOWSKI: Mr. Speaker, in respect to the restraint budget which is in effect for '87-88, I would remind the hon. member that special education was the one area in the Depart ment of Education budget which was not reduced by any amount over the previous fiscal year.

And secondly, I'm pleased to hear the endorsement by the hon. member for the School Act, which now guarantees for the first time in Alberta's history right of access of every student in the province to educa tion, including those with special education needs. MR. DAY: Mr. Speaker, to the Minister of Education. Can the minister tell us, in light of the fact that there are only two other provinces in the country which fund education at the rate of more than $5,000 per student, does she anticipate that we will be able to keep above that $5,000 per student per annum mark? MRS. BETKOWSKI: Again, Mr.

Speaker, as much as I know everyone's . . . MR. SPEAKER: Just for a moment, perhaps we could gain a little more attention in the House. Please continue. MRS. BETKOWSKI: Mr. Speaker, as much as I know that everybody's looking forward to the Department of Education budget for '88-89, I'm afraid it would be very improper for me to speak to it here. MR. SPEAKER: [interjection] Not yet, hon. member. The Chair appreciates the alacrity and the enthusiasm of the member. However, points of order arising in question period must be dealt with first, hon. member. MR. WRIGHT: I'm obliged to, Mr. Speaker. MR.

SPEAKER: Perhaps the Chair will now recognize Edmonton-Strathcona. MR. WRIGHT: I repeat, I'm obliged to, Mr. Speaker. Mr. Speaker, in ruling a number of questions out of order concerning activities which might be construed as dealing with the Principal Group of companies, and in particular when you spoke first concerning the hon. Member for Little Bow's ques tion, you said that there are innumerable court actions; there is the Ombudsman's inquiry and there is Mr. Code's inquiry, ap pointed by the Queen's Bench. Certainly, if any questions impinged on particular actions taken by people named or clearly

1990 ALBERTA HANSARD November 23, 1987 referred to in a question, it's the duty of the members asking to assure themselves of the existence of such actions. But we're talking really about more general questions, obviously, from what was asked, Mr. Speaker, and I most respectfully submit that nothing the Ombudsman is dealing with or anything Mr. Code is dealing with can furnish a basis for the application of Standing Order 23. Obviously, it's not sub judice. Mr. Justice Berger gave the inquiry a push, as it were, launched it on its sea of inquiry, and Mr. Code is navigating his way on that sea.

But the judge is functus, and there is no obligation on Mr. Code to ever bring it back before a judge. And so it's not sub judice in the ordinary sense. On the wording of Standing Order 23, that of course goes a long way beyond matters in court, but I suggest that it always has to be by analogy, that what we're dealing with is an inquiry affecting people's rights that in the end the inquirer can make a pronouncement about. And the thing that has to be noticed is that either it must be, in order to fit within the rule, a matter pending in a court or before a judge for judicial determination.

And I've adverted to that, Mr. Speaker. Or it must be before any quasi-judicial, administrative or investigative body constituted by the Assembly . . . I'm quoting from rule 23(g), as I'm sure you'll recognize, Mr. Speaker. And in addition, it must be a matter where any person may be prejudiced in such matter by the reference. Now, the important thing first to be noticed, after we've dealt with the question of whether it's before a court, which it isn't, is that the word is "body," and body cannot mean just a single person.

It, in ordinary parlance, means a body of persons -- a tribunal, in other words -- and if it is to mean a single per son, then surely the word "person" would have been used. And, Mr. Speaker, later in the very same suborder the word "person" is used and clearly intended to be used. Thus, one is forced to ask: if "person" was meant a few lines earlier in the same sub order, why did they use "body"?

And it's a matter of common sense, as well as being one of the more elementary rules of con struction, that in statutes and kindred instruments such as Stand ing Orders, which are written by parliamentary draftsmen, words are not changed in the course of an instrument without a change in meaning. This presumption is well-nigh irrebuttable where there has been a change of words in the course of a single sentence, as is the case here. The conclusion is, I submit with the greatest respect, Mr. Speaker, inescapable: that a "body," to which Standing Order 23(

g) refers, must consist of more than one person. The Code inquiry is an inquiry by him and him alone, in point of law: Mr. Code. And also, insofar as the Ombudsman is concerned, he alone is the person empowered, and he is not a body. I submit that when that rule was put into force in 1973, it would apply to a tribunal such as the Liquor Control Board, the Securities Com mission, the Alberta Human Rights Commission, and similar. Mr. Speaker, the other matter that must be decided is whether anyone is prejudiced by the answers that would be given to the questions hon. members were stopped from asking.

The answer must be "no," because the questions all related to matters of government policy, and the injury to any one person would be no greater than the injury to everybody. The benefit to one person would be no greater than the benefit to everybody, with the exception, of course, of the possibility that the govern ment would own up to what we conceive to be its respon sibilities and to indemnify those who have suffered because of government regulation. On the question of the Ombudsman, Mr. Speaker, which is the other "body" -- I've argued it isn't a body.

In any event, it can hardly fit within the rule, because the Ombudsman -- while it is true he does investigate the government, unlike Mr. Code, who does not -- his investigation is in secret and nothing he dis covers need ever be disclosed. So the whole purpose of the rule would be defeated, because it might be the case that people are ruled out of order in asking questions when the truth would never appear, and that is a perversion of the rule. I remind you, Mr. Speaker, that Mr. Code is only empowered to inquire into the activities of the companies.

True, he has the power to subpoena officials of the government and, indeed, min isters. In the case of ministers no subpoena is necessary; you just ask them to turn up. But that is only in order that those offi cials and ministers may shed light on the activities of the com panies. It is the Ombudsman and the Ombudsman alone that has the power to investigate the government. Indeed, Mr. Jus tice Berger made that very same ruling. He didn't mention the Ombudsman.

In response to the government's creditable, I agree, attempt to widen the terms of reference of the Code in quiry to include investigation of the government's role, he said, "No, that is not my jurisdiction under the Business Corporations Act." So, Mr. Speaker, I submit most respectfully that when you consider this, as I'm sure you will do in the next few hours, you will take these points into consideration, consider the scope of that rule. I would be very glad, Mr. Speaker, to give you the brief we've prepared on the matter, which says at a little greater length and in more detail the submission I've just made.

MR. HORSMAN: Mr. Speaker, speaking to the point of order, I think it quite shocking that the hon. member has not read on in the rule to include matters that are before any quasi-judicial, administrative or investigative body constituted by the Assembly . . . He stopped there and left out the words or by or under the authority of

an Act of the Legislature. MR. WRIGHT: [Inaudible] body. MR. HORSMAN: The body constituted by or under the author ity of

an Act of the Legislature. There are two Acts of the Leg islature which constitute a body which is in the process of in vestigating this matter, the first of which is under the Business Corporations Act pursuant to an application brought by the gov ernment itself, and secondly, pursuant to the Ombudsman Act. Certainly both of those are Acts of the Legislature, and in vestigations are now under way under the authority of those Acts -- not just

an Act but two Acts. For the hon. Member for Edmonton-Strathcona to get up and cite to the Assembly part of the rule I think does a disservice to the Assembly and to the public. [interjections] Mr. Speaker . . . MR. SPEAKER: Order please. The Chair is seeking advice, not getting shouted down in the din. Hon. minister, please proceed. MR. HORSMAN: Now, that is quite clear, that the entire rule must be read and not just part of it.

To read that, it is quite clear that the government has ordered an inquiry under the terms of the Ombudsman Act and has sought court-approved investiga tion under the Business Corporations Act. In that process it is the government's intention to bring all matters to light relating to this issue. And if one would read the material filed today by

November 23, 1987 ALBERTA HANSARD 1991 the hon. Provincial Treasurer, it would be seen that the govern ment has asked for a complete and full investigation of the gov ernment's role in this matter. Therefore, it is clearly sub judice relative to this Assembly and discussions taking place within this Assembly having the potential of prejudicing the outcome of the investigations. Further to that, it is clear that there have been a number of legal actions commenced, at least one of which has been com menced by an individual against the government alone.

That matter is now before the courts in the sense that the statement of claim has been filed and defences have been prepared and, if not filed, are in the process of being filed. That of course brings the matter relative to this issue even more under the sub judice rule in the sense that there is in fact legal action which involves the government as a party to a legal action, not at its own initiation but at the initiation of another. So it is quite clear. Mr.

Speaker, if one wants to go back and look at Beauchesne or in fact to Erskine May, that the Standing Orders of this Assembly are much broader than either of the two authorities which have been relied upon in this Assembly on many occasions, and this of course applies to a matter pending in a court. I've already mentioned that there is at least one mat ter before a court in which the government is solely named as a defendant, or before a judge for judicial determination. It more importantly applies to a matter "that is before any . . . investiga tive body constituted . . . by or under the authority of

an Act of the Legislature" -- the Business Corporations Act and Om budsman Act -- so it is clearly sub judice to become involved. The government has made it clear. Another little important thing which must be set straight is that the Code inquiry is constituted under an order of the Court of Queen's Bench of this province which requires, as part of that order, that the investigator report back to the Court of Queen's Bench. That Court of Queen's Bench is required to supervise the conduct of the matter, and the court is not functus according to the terms of the original order.

For the hon. member to sug gest such -- in that respect, he is clearly mistaken. Therefore. I would suggest that on the basis of that, ques tions are quite out of order if one leads to other than a recital of the facts leading up to the steps taken by the government rela tive to the matter. It is now being investigated thoroughly under two pieces of legislation which of course will be made public. That has been recognized by the Ombudsman in his reply to the government order, and of course he himself has had individual Albertans approach him as well.

On that basis, on both those matters the investigation is under way. It will be thorough and complete, and the government has made it clear that there is ab solutely no intention to hide anything from either of the investigations. MR. MITCHELL: Mr. Speaker. I would like to join briefly in supporting the Member for Edmonton-Strathcona in his bid to have you review this particular

section of the Standing Orders favourably so that we will be permitted to at least question the government on its role in the Principal Group affair. If one were to be cynical, and that is a sentiment found often in politics, it would be easy to analyze the current web of in vestigations as neatly missing the government's role specifi cally. The Code commission has been charged with the objec tive of determining the reasons for the failure of First and Asso ciated and has been given the powers to call witnesses from government.

The difference between the objective and the pow ers is a very, very critical difference. The Code commission will certainly be able to look at those reasons directly related to Principal Group for Principal Group's failure. However, it will be unable to look specifically at how the government's role in that failure may have contributed to the failure.

Secondly, with respect to the Ombudsman's review, it is not immediately obvious that the Ombudsman's review will be able to consider policies which could have been considered at the time -- say, June 30 -- but which were not developed by this par ticular government. I will use an example of an issue that I think is very, very critical to be reviewed in this respect. I would also like to say that Ombudsman review of government action at any given time has never before in this House, while I have sat here, been used as a precedent under

section 23 for not permitting further questions on a given issue which the Om budsman might be reviewing. For example, the Ombudsman is always reviewing Workers' Compensation Board issues. We can ask questions on the Workers' Compensation Board; they have not been ruled out of order. AN HON. MEMBER: Don't give him ideas. MR. MITCHELL: The Ombudsman is consistently reviewing social welfare policy problems, health care problems. We have never before been ruled out of order . . . MR. SPEAKER: With due respect, hon. member, could you stick to specific issues, but please continue. MR. MITCHELL: Well.

Principal is a specific issue, of course. I would like to. therefore, summarize these first two points by saying that Code will look at the reasons for the demise of First and Associated, but not so far as those reasons might affect the government's involvement. The Ombudsman may or may not be able to consider policy matters related to the demise and the manner in which First and Associated were dissolved -- may or may not be able to do that -- and certainly the Ombudsman re view of matters has not been used as a precedent for the House not being able to review them in the past.

There is one particular policy that I think this government could have utilized which will not be reviewed, and its failure to utilize that policy will not be reviewed because it will very neatly fall between this web of investigations. I am referring to the fact that the mutual funds owned by Principal Group were sold for $15 million two months after First and Associated were delicensed. A year before First and Associated were delicensed, those same mutual funds were valued by Wood Gundy in a prospectus on file at the Alberta Securities Commission at be tween $120 million and $140 million.

The clear indication is that due to the precipitous action . . . MR. SPEAKER: Order please, hon. member. The specifics of this, while interesting to all readers of Han sard and those of us here, really is moving us a little way off from what the argument of the point of order is all about. MR. MITCHELL: Mr. Speaker, I will just finish it up briefly. I think it is an excellent example of how an important issue re lated to the Principal Group affair and the government's in volvement in it will fall between the cracks, as it were. Here is a case where we know that those mutual funds were sold for $15 million.

We know that they were worth consider ably more a year before. An argument can be made that govern ment policy to dissolve First and Associated, to delicense them

1992 ALBERTA HANSARD November 23, 1987 in the way that they did, resulted in the frittering away of tre mendous value that, had it been managed properly, those com panies could have been taking to the market. They could have been sold; $120 million, $140 million could have been retrieved and placed in First and Associated to support those investors. This kind of issue will never be reviewed under the current structure of reviews, either Code or the Ombudsman.

There fore, upon the Legislature falls a tremendous responsibility, a fundamental responsibility to discuss that kind of issue and to discuss the policy and other possible legislative matters that could have been brought to bear by this government in the reso lution of this particular issue, which weren't and which will go unregarded by the two particular investigations which have been undertaken to this point. MR. SPEAKER: Edmonton-Highlands. On the point of order, it's generally customary to speak once, hon. member. MS BARRETT: Thank you, Mr. Speaker.

I hope when you're considering the merits of this issue, you'll take into account that the Ombudsman did ask for an expanded framework for his in vestigation and that that expanded framework was denied. Now, we are talking about 30,000 or more Albertans here. They certainly, I think, are entitled to some answers, given that their life savings in many instances were at risk. Now, the Fed eral and Intergovernmental Affairs minister argues that part of Standing Order 23 in reference to any quasi-judicial, administrative or investigative body con stituted by the Assembly or by or under the authority of

an Act of the [Assembly] makes the issue automatically sub judice. I would argue, Mr. Speaker, that that's utter nonsense. First of all, we could never know, for instance, what by and large the Ombudsman is investigating from on a day-to-day basis. Secondly, Mr. Speaker, if he were investigating a matter in which an individual's right to appeal through the court system would be jeopardized, he would be breaking his own Act. So one of two things is true: either the Ombudsman is conforming with his own Act, in which case this issue is not strictly sub judice, or he is breaking his own Act.

I can't believe that the government would authorize the Ombudsman to be conducting an investigation which would violate the Act itself. Finally, Mr. Speaker, it seems to me that this government can stand up and be accountable now or it can wait; it can allow all these investigations to drag on and hope that it gets through the next election. But I don't think that's the fair way to do it.

Any issue this government wanted to avoid talking about in this Assembly where elected officials represent Albertans, they could do theoretically by saying: "Oh, we're handing it over to a quasi-judicial body" or "Oh, that's under investigation by an organization that operates under the authority of

an Act passed by this Assembly." There is no end of manipulation that's avail able, Mr. Speaker. We ask that you consider this matter and give everybody fair opportunity to deliberate the issue in a way that won't prejudice the individuals who may seek right of ap peal as specified not only in the Standing Orders but in Beauchesne and Erskine May and again in the Ombudsman Act itself. MR. SPEAKER: Government House Leader. MR. YOUNG: Mr.

Speaker, I'd very briefly like to commence some brief remarks by distinguishing between what the Om budsman does as a routine part of his activity, which is to in vestigate specific problems that come to him, and a major as signment such as he has received. Further, to make the point even more clearly, today at the commencement of the session there was tabled with the Legislature documentation relative to the Ombudsman's investigation of that assignment.

I would read paragraph one, which is: Alberta Ombudsman, Aleck Trawick, has announced that he will investigate the involvement of the Provincial Government in the financial collapse of the Principal Group of Companies. Now, Mr. Speaker, that is dated October 20, 1987, over the Om budsman's signature, surely indicating the extent and breadth and completeness of his review of the government's involvement. Further, on November 4, again at the request of the Om budsman, it was announced that a special warrant had been ap proved to provide the Ombudsman with $200,000 in order to carry out that very thing.

I think that addresses one of the com ponents of the issue that has been raised here. Mr. Speaker, enough comment has been made about the sub judice rule. But I would like to state why, and I go back to what was stated by the hon. Member for Edmonton-Strathcona at the very commencement of his remarks this afternoon. He said that his concern was to protect people's rights where affected. He said, "affecting people's rights", and that's why he was inter ested in being able to ask questions.

The sub judice rule is quite clear, and I again refer in this case to Beauchesne: Members are expected to refrain from discussing matters that are before the courts or tribunals which are courts of record. The purpose of this sub-judice convention is to protect the par ties in a case awaiting or undergoing trial and persons who stand to be affected by the outcome of a judicial inquiry. It is a voluntary restraint imposed by the House upon itself in the interest of justice and fair play. Mr.

Speaker, I go from that comment to some of the other discussion I've heard here this afternoon which is speculative as to the entanglements and interrelationships between companies that are involved in this overall matter. Those are things which the whole purpose of the Code inquiry, ordered by the Court of Queen's Bench, is directed to unravel in a fair and objective and complete way. Secondly, Mr. Speaker, I refer, as has already been done, to the extent of the Ombudsman's ambit of his directions and directives. Thirdly, Mr.

Speaker, I refer to the specific case: a statement of claim brought against the government in this particular mat ter. It is quite clear that almost any question dealing with any of the detail of Principal could be construed in a manner as to im pinge upon the justice and fairness of some party and their rights and potential responsibilities in this investigation and in this matter. MR. MARTIN: Mr. Speaker, I will be brief. If the hon.

House leader is going to quote what the Ombudsman is asking about, maybe he will go through the rest of it where very clearly the Ombudsman says that because of the nature of the Ombudsman Act, where it's done behind closed doors, he has asked specifi cally that the government open up the inquiry, that the Code inquiry is much too limited. That's the point we're trying to make, Mr. Speaker, that the Code inquiry is a very limited in quiry because it's under the Business Corporations Act.

Now, this government would have some basis in reality to say that it was under the sub judice of the government's role in this if in fact they'd put it under a Public Inquiries Act, which we asked

November 23, 1987 ALBERTA HANSARD 1993 for in the first place. But they didn't do that. So they can't say now, because they've taken a limited Act that even the Om budsman has acknowledged, that they can hide behind the whole sub judice Act. It is just not fair to people; it's not fair to this Legislature. It's a very limited Act. If they want to look into the government's role even at this late date, put it under the Pub lic Inquiries Act. Then they have a case, Mr. Speaker, not here. MR. FOX: Mr.

Speaker, in the interests of ensuring that the information you have before you prior to making your deter mination of this subject is accurate, consideration or examina tion of the correspondence between the at the time hon.

Acting Provincial Treasurer and the Ombudsman prior to the announce- ment of his inquiry which the Government House Leader just read -- and I'm sure members of the committee would back me up on this -- the Ombudsman felt compelled to conduct this in vestigation based on complaints received from injured persons coming to his office in much the same way as they do for any one of a wide variety of complaints and not specifically because he was ordered to or compelled to by certain sections of the Ombudsman Act.

It was initiated in large part because of com plaints that came directly to him, and I submit . . . [interjec tions] They're both in the Act, and a review of the correspon dence will bear me out. I'd just like to underscore what the hon. Member for Edmonton-Meadowlark said. If we were to consider anything that's before the Ombudsman as being sub judice. then our deliberations in this Assembly would be even more limited than they are today. MR. SPEAKER: Member for Calgary-Mountain View, the Chair would inquire: will this also cover the other point of or der that the member was going to raise earlier? MR.

HAWKESWORTH: Pardon me? MR. SPEAKER: Could this matter also refer to the previous point of order from Calgary-Mountain View? MR. HAWKESWORTH: I believe. Mr. Speaker, that we're trying to determine what your ruling might be as it applies to these matters generally, and we're hoping that that kind of rul ing will clarify all of these. I'd like to pick up on the comments made by the hon. Government House Leader in which he quoted the sub judice convention from Beauchesne. I think it's impor tant to note there are a couple of citations that weren't quoted.

In fact in civil cases, number 337 on page 118 of Beauchesne, fifth edition: No settled practice has been developed in relation to civil cases. I think that's an important point that's been overlooked. as the convention has been applied in some cases but not in others. In civil cases the convention does not apply until the mat ter has reached the trial stage. But I think perhaps the most important one for your con sideration. Mr.

Speaker, is number 339: The Special Committee on the Rights and Immunities of Members recommended that the responsibility of the Speaker during the question period, which is what we're discussing at this time, should be minimal as regards the sub-judice convention, and that the responsibility should principally rest upon the Member who asks the question and the Minister to whom it is ad dressed. However, the Speaker should remain the final arbiter in the matter but should exercise his discretion only in excep tional cases. In doubtful cases he should rule in favour of de bate and against the convention.

I think. Mr. Speaker, having more or less placed the entire sub judice convention on the record, it will give a broader per spective as to how Beauchesne views this matter. And I think it's clear from that overview that the emphasis and the priority should be on the give-and-take in question period as opposed to using it as a means to stifle that, and that to stifle the give-and- take in question period and leave it to the members to exercise their responsibilities as a sub judice convention in Beauchesne seems to indicate.

I think the key element through all of this is that no person should be prejudiced in such matter by the reference, quoting from our Standing Orders. I think throughout our Standing Orders and the sub judice convention, the question is that the rights of private citizens not be prejudiced by the dis cussions that take place, and as has already been stated, ques tions of government policy should be a matter properly before the Assembly in that those should not in any way be prejudicing individual persons. Thank you, Mr. Speaker. MR. KOWALSKI: Mr.

Speaker, selective quoting from docu ments is always a fascinating aspect when it comes to a debate with respect to a matter before the House. My hon. friend from Calgary-Mountain View has selectively quoted certain citations from at least one document that the House has always followed in terms of adjudicating its actions, and, Mr. Speaker.

I would like to quote to you from Beauchesne's parliamentary rules and forms an addendum to the sub judice convention 335. which basically says very clearly: Members are expected to refrain from discussing matters that are before the courts or tribunals which are courts of record. My hon. friend forgot to make mention of 338(3), which states very clearly: The convention applies to motions, references in debates, questions and supplementary questions . . . I stop at that point, Mr.

Speaker, because I think it's extremely important when you come towards making your decision on this matter that you certainly bear in mind

section 335 of Beauchesne and 338[3] of Beauchesne, as well as. of course, the Standing Orders of this particular Assembly,

section 23(g), that has already been talked about which basically says that a mem ber will be called to order by Mr. Speaker if that member refers to any matter (

i) that is pending in a court or before a judge for judicial determination, or (ii) that is before any quasi-judicial, administrative or in vestigative body constituted by the Assembly or by or under the authority of

an Act of the Legislature. Mr. Speaker, it's very clear, the rules which members of this Assembly are bound by. Thank you. MR. SPEAKER: The Member for Edmonton-Strathcona, one last time. MR. WRIGHT: Yes. merely to reply to matters raised by the Attorney General. Mr. Speaker. MR. SPEAKER: In relation to the point of order. MR. WRIGHT: Yes. exactly.

1994 ALBERTA HANSARD November 23, 1987 I think the hon. Attorney General failed to quote the Busi ness Corporations Act,

section 223, correctly. Unless I'm miss ing something. Mr. Speaker, there's no obligation at all on Mr. Code, in his capacity as an investigator under that section, or at all under the Business Corporations Act, to report back to the court. His obligation is solely, and I quote 224(2): Unless the Court otherwise orders, an inspector shall send a copy of his report to the corporation. Not to the court. And the court has not otherwise ordered. The other two short points raised by the Attorney General. True, I did not read the rest of the subsection that said "body constituted by the Assembly or by or under the authority of

an Act of the Legislature," because it's irrelevant. If it's not a body, it doesn't matter if it's incorporated by God himself; it still has to be a body. It's no good saying it might prejudice the investigation, because it must be a person to come within the rule. Thank you, Mr. Speaker. MR. HORSMAN: Mr. Speaker, do I get a rebuttal to the rebut tal? I'm astonished at this course of conduct. MR. SPEAKER: Hon. members of the House, the Chair has obviously listened to the advice of its colleagues in the House with due care.

I'm sure it wouldn't surprise the House to dis cover that the Chair has been trying to review a tremendous number of legal opinions over the past number of weeks and days, so there are some other elements in the background where the Chair has had some time to give some considerable thought to the rather exceptional case which this really presents to this Legislature. "Exceptional case" I think was a phrase used by the Member for Calgary-Mountain View.

So I would turn it to say that this is indeed a special circumstance and that perhaps spe cial ways of dealing with the matter can indeed be employed, and the Chair attempted to offer that advice to the House earlier. Nevertheless, I must also say that parts of the arguments I was hearing this afternoon reminded me of what might be the old days, when I was having to put up with lectures on philoso phy and having to listen to medieval arguments about how many bodies or individuals or angels reside on the head of a pin. That's very difficult as to the

definitions I've been attempting to follow with due care. Indeed, the proper references are there within our Standing Order 23 as to what constitutes the various bodies or in accord with legislation as passed by the House. There again we have to take that firmly into consideration. One of the issues as raised is with respect to the Code in vestigation of Principal Group, and since reference has been made to this, I would read this into the record. In an order of the Honourable Mr. Justice R.L. Berger the mandate of Mr. Code was described as follows, and I will quote in a moment.

I invite hon. members to draw their own conclusions as to whether this is too narrow a scope or too wide a scope with re gard to what is going on. The Chair directs the page to violate the usual protocol and bring the document from the Table, please. It's germane to this next statement. Thank you.

The quote from Justice Berger: The Inspector may conduct such hearings as he requires from lime to time and shall have the power to summon and compel attendance of witnesses and, without restricting the generality of the foregoing, shall have the power to summon Ministers of the Crown in right of the province of Alberta and their deputies and employees of the Province of Alberta duces tecum or otherwise, may require production of documents, administer oaths and may seek advice and directions with respect to such proceedings from time to lime as required.

Now, it is my understanding, as has been pointed out to the House, that indeed Mr. Code must report regularly to a judge. In that regard, reading from the official document . . . There's certainly one thing about this: it's encouraging the forestry in dustry and the paper-making process in this whole issue.

Nevertheless, reading from the official document as filed July 15 in the Court of Queen's Bench in Edmonton: To determine whether the business or affairs of the debtor company have been carried on and conducted or the powers of the directors of the debtor company have been exercised in a manner that was oppressive or unfairly prejudicial to or that unfairly disregarded the interests of the security holders of the debtor company and report to the court as required. It's my information that Mr.

Code has since reported to the court as of September 30, so one could presume that this ongo ing reporting process will indeed take place. With respect to the matter of the Ombudsman, information as supplied to the Chair with respect to the scope of the investiga tion . . .

First of all, the matter of a press release as dated Oc tober 20, as issued by the Ombudsman, that his investigation of the government's role will be conducted on behalf of the Princi pal investors, and indeed points out that a considerable number of them have submitted written complaints to the Ombudsman, but in addition that the matter was referred, directed to the Om budsman. The Ombudsman also commented in his report that he would investigate further, as necessary, to determine the in volvement of the provincial government.

On the matter of October 14 there is a letter from the Acting Provincial Treasurer to the Ombudsman, which states: I would like you to consider this letter a Ministerial Order for your office to conduct the broadest possible review of the provincial regulatory process and administration of these Regulations. And going on further, . . . you may wish to review additional mailers beyond Mr. Code's investigation in order to conduct the broadest possible review, as requested above. Now, that is with respect to the Ombudsman.

In addition, I should make a brief comment that, as pointed out by, I believe, both the Member for Edmonton-Meadowlark as well as the Member for Calgary-Mountain View and others perhaps, that saying, "Well, this particular issue, because it's before the Om budsman, if it is indeed ruled sub judice, therefore what happens to any other item that is before the Ombudsman for investiga tion?" Well, here again, we come back to the words "exceptional case, exceptional circumstances." We as a whole House are very much aware that this issue is before the Om budsman,

whereas with respect to other issues which may arise in question period oftentimes, no hon. member in the House is aware of the fact that it is therefore before that office even though it is an individual person occupying the body corporate of the office of Ombudsman. So that's the difference that is pointed out with respect to the Ombudsman at this time.

The Chair would like to go on further to deal with the matter, as pointed out here, that we have an interesting variation be tween our Standing Orders and the matter of Beauchesne, so we have the practice which is in place in Alberta as compared to the practice that is in place in our Parliament in Ottawa. Indeed, the Member for Calgary-Mountain View points out that there's a little more scope to bring certain matters before a House, before the federal House of Commons. But in actual fact, in examining the history of the issue, at one time there was a much more rigid

interpretation of the sub judice rule in our federal House, which

November 23, 1987 ALBERTA HANSARD 1995 in turn was a direct copying, if you will, of what the practice and convention has been in the House of Commons at Westminster. But in recent years it is indeed true that our federal House has granted more laxity or a greater scope. The other interesting thing is that the majority of the provinces, including this one but not solely this jurisdiction, have a far more rigid

interpretation in their Standing Orders. And while we may cite Beauchesne, as we often do, neverthe less the first order that determines the order of this House is our Standing Orders, and they take precedence. So that's a very weighty issue in terms of what we are dealing with at this time. I would also like to point out that you don't need me to go back to read you Standing Order 23. We're all going to be able to read it in our sleep, I think. But in terms of the sub judice convention, Beauchesne 335, as appropriately pointed out by the Deputy Government House Leader, one ought to read the whole section.

And in 335 it reads thusly: Members are expected to refrain from discussing matters that are before the courts or tribunals which are courts of record. The purpose of this sub-judice convention is to protect the parties in a case awaiting or undergoing trial and persons who stand to be affected by the outcome of a judicial inquiry. It is a voluntary restraint imposed by the House upon itself in the interest of justice and fair play.

And so it is that, as earlier today, I pointed out with regard to Beauchesne 339 that again the responsibility should rest upon the member who asked the question and the minister to whom it is addressed to determine whether it is indeed sub judice. Now, we have some other further issues that have to be men tioned in terms of what we're doing here, and I would like to point out that numbers of people have talked about the numbers of, you know . . . [Mr. Speaker knocked his microphone] . . . how complicated this issue is. Sorry to rattle your eardrums.

I was just checking to see if you were still awake, because if I had to listen to this, I think I would be more than a tad confused. But I do wish to go on a bit further and for public record. I would like to be able to say, well, this is only a simple issue; it's only Principal Trust -- that's a very considerable "only." But it isn't only Principal Trust. May I introduce all of us to the complexity of the issue, and with or without your per mission I'm now going to read 37 names which come under the whole umbrella of Principal Trust.

So is this House then going to have to worry about what are the names that are raised? So, hon. members, I beg your indulgence. These are part of the Principal Group. These are the identifiable ones that we have as Table officers with regard to the Principal Group: Athabasca Holdings Ltd., Collective Securities Ltd. . Connie Ranch Ltd. .

Principal Group Ltd., Alpha Graphics Limited, Associated In vestors of Canada Ltd., Bomac Battan, Collective Mutual Fund Ltd., Custom Digital Houston (U.S.), Custom Digital Services Denver (U.S.), Data Acquisition Inc. (U.S.), Drummond Brew ing Company Ltd., Energy Resource Division, Evergreen Geophysical Associates Inc. (U.S.), First Investors Corporation Ltd., Matrix Investments Limited, Mercer & Williams Agency Ltd., Neo-Sels Inc. (U.S.), Phipps Graphique Inc., Phipps Reproduction Co.

Limited, Principal Arizona Tax Free Fund Inc. (U.S.), Principal Bond Fund, Principal Canadian Mutual Fund Limited, Principal Certificate Series Inc. (U.S.), Principal Consultants Ltd., Principal Equity Fund Inc. (U.S.), Principal Franchising Inc., Principal Growth Fund, Principal Investors Corporation (U.S.), Principal Life Insurance Co. of Canada, Principal Management Inc. (U.S.), Principal Multiplyer Fund, Principal Neo-Tech Inc., Principal Savings and Trust Company, Principal Securities Management Ltd., Principal Venture Fund Ltd., Principal World Fund Inc. (U.S.), Scan-Graphics Limited.

It's worth while to read that into the record to see the chal lenge that awaits all comers of this House when dealing with the issues. Now, no matter how one feels about the scope of the Code inquiry or the Ombudsman's investigation or the complexity of the issue, some members have raised the fact that there are no court cases in process. Ladies and gentlemen, I beg your in dulgence. It is my understanding -- you'll forgive me for dirty ing up the dias -- that I have here a complete computer printout which represents something like 5,000 cases that are before the courts.

Now, earlier today the Chair attempted to bring some meas ure of -- what shall we say? -- a balanced approach to how the House might deal with the issue. The Chair could indeed bang down and say under Standing Order 23, the subsections, "That's it, folks; game over." The Chair has not done that. The Chair has attempted to address the House in a constructive, bridging arrangement and has had to rule some questions out of order because of the Chair's

interpretation of what the sub judice con vention meant with respect to the particular questions. The Chair understands fully that no one is further from being perfect than myself. But the Chair again has to rely upon the member of the House asking the question as to whether or not it is sub judice and not try to bring the issue to the floor when the mem ber knows full well that the matter is before the courts.

By the same token, after the member has attempted the ques tion, it's up to the minister then -- as the next line of defence, if you will, for the purposes of parliamentary process in this House -- to say "I'm sorry, that is sub judice in my opinion," and say no more. It is a very difficult challenge for all members of the House.

And so it is, as I said earlier today, bearing all these things in mind so that indeed if there is a question that can be asked within the parameters of the challenge that is here for us to gether as legislators -- that I have asked the indulgence of the House that then the matter be brought forward, that the question be reviewed by the Table officers and myself as to whether in deed it is in order and admissible, and then we go back to the true parliamentary tradition, which is to have written questions.

That is the way that we can find what are the legitimate ques tions, the admissible questions, to be delivered to the Order Pa per of the House so they can be dealt with in due course. So the Chair thanks all hon. members for their attention as well as for their input, but the Chair still rules: no point of order. The Chair recognizes Calgary-Mountain View on a point of order out of question period. [interjection] Thank you, hon. Member for Calgary-Mountain View. The Chair recognizes the Member for Calgary-Buffalo. Point of Privilege MR. CHUMIR: Thank you, Mr. Speaker.

On June last, the As sembly directed me to apologize in respect of the service of a statement of claim within the precincts of the Assembly, but the pain which I have just experienced at being unable to participate in question period and the debate just concluded, which explains the gazelle-like alacrity with which I rose a few moments ago -- this is my first opportunity to address the issue.

Out of respect for the role that our Legislative Assembly plays in the demo cratic process, I am now rising to apologize and do apologize to the Minister of Career Development and Employment, to the Provincial Treasurer, and to the Assembly for unknowingly and

1996 ALBERTA HANSARD November 23, 1987 unwittingly breaching the rules of this Assembly by such service of the statement of claim. I look forward to continuing good relations with the minis ters and indeed with all members of the Assembly as we carry out our duties to advance the public interest in the best demo cratic tradition. [applause] MR. SPEAKER: The Chair sincerely appreciates the generous apology of the Member for Calgary-Buffalo. Member for Edmonton-Strathcona, with respect to emer gency debate, I believe. head: Request for Emergency Debate MR. WRIGHT: Yes.

I rise under Standing Order 30(1) and (2) to seek leave to move the adjournment of the ordinary business of the Assembly to discuss a matter of urgent public importance, Mr. Speaker. The matter is the government's failure to fulfill its obligations to protect the people of Alberta with respect to First Investors Corporation Ltd., Associated Investors Corporation Ltd., and other members of the Principal group of companies, and its failure to call a proper public inquiry into the collapse of these companies. Speaking very briefly on why it is a matter of urgent public importance, Mr.

Speaker, I point out what I think many of us know but should go on record. There are -- the number is un certain -- between 20,000 and 40,000 citizens of this province, many of them aged, with a large proportion of their money in the two failed companies in particular, who are in dire straits as a result of developments. The government has known for years there was difficulty here. In the last two years the returns them- selves required by the Investment Contracts Act were improper.

For the last two years the government itself, we understand, circulated a directive that no government funds be placed with these corporations. It took 30 days to withdraw the licence to trade after they had come, saying they were insolvent. In fact, it wasn't until the companies themselves moved under the compa- lues creditors arrangement Act that the company removed the licence. No public inquiry into the government's activity under the Public Inquiries Act, or effectively at all, has yet been called. The matter is crying out for answers. It is a matter of urgent public importance, Mr. Speaker. MR.

SPEAKER: Speaking to the urgency of the debate, Gov ernment House Leader. MR. YOUNG: Mr. Speaker, to the urgency and, if I may as well, to the appropriateness. If I could deal with that first, I would again recall to the recollection of hon. members the de bate just had with respect to the ambit of the inquiry by the Om budsman and also by that ordered by the Court of Queen's Bench, and indicate that there is under way a total investigation by the Ombudsman into the involvement of the provincial gov ernment in the financial collapse of the Principal group of com- panies. As a matter of fact, Mr.

Speaker, I would go further and quote from the letter which directed the Ombudsman to do an investigation and follow it up. The paragraph I quote is to this effect: The Government of the Province of Alberta is confident that the broad, investigative powers of both Mr. Code and the Om budsman will result in a full, complete and detailed investiga tion of all relevant matters and, in so doing, leave no stone unturned. Mr. Speaker, it is clear that the matter is completely under in vestigation.

It is further clear -- and that has been attested to by the statement of the Attorney General this afternoon -- that an action has been taken against the government in terms of the government's role, so it falls clearly under the sub judice provi sions. Now, those provisions are there for the purpose of protecting the interests of other parties. We've dwelt on them at great extent this afternoon; I'll not repeat them. Finally, Mr. Speaker, I would suggest that the motion is out of order for that purpose.

But equally so, there is a full and fair inquiry ongoing at the present time and, therefore, no urgency in the matter. MRS. HEWES: Mr. Speaker, I support the need for this debate to take place in this House. I certainly do with eagerness and look forward to it with eagerness and would hope that all mem bers would support an opportunity to do it. I'm sure there isn't a single member here that has not over the last several months had a trail of people in his or her office who tell a very similar story, and it's a tragic story.

Often in my case it's been -- and I don't think I'm unique in this -- people who have been prudent, thoughtful investors, who are sophisti cated investors, who did in fact ask the right questions. It's curious to me, Mr. Speaker, that when the FIC/AIC col lapsed and the licensing was removed for them, there seemed to be no energetic move on the part of government other than to de-license those two companies.

The government, however, at some point in the near future, realizing, I gather, that there were a great many investors out there who had deep and abiding con cerns about what was occurring here, seemed compelled by pub lic opinion then to take some steps towards an inquiry. Now, we were all treated to a variety of timings and suggestions as to what that inquiry would consist of, but . . . [interjection] I'm getting to the urgency, sir. In fact, the government moved very, very slowly. What I have not seen at any point in time, Mr.

Speaker, and what I believe we need to get to and get to in depth, is: I have not seen any satisfactory answer, nor have the investors, nor has the public of Alberta, as to why this was not done under the Public Inquiries Act. We have never had a satis factory answer to that question. Mr. Speaker, further to that there is one other very pressing question in general, and that to me is the major reason for the urgency of this debate, sir. That is the whole area of licensing, monitoring, enforcement of regulations in this industry.

That has been called to question in the last four or five months, and the confidence of Alberta and Albertans not only in this prov ince but across the country is, yes, Mr. Minister, urgent. I think we ignore that at our peril. It is an urgent situation. Mr. Justice Berger has stated very clearly what the inquiry can and can't do. Mr. Premier states very clearly that if the courts order, there will be compensation. The public urgently needs to know if and how this pair of inquiries is intended to achieve that, because that confidence has not only been eroded, Mr. Speaker, I suggest it has been destroyed. MR.

SPEAKER: Calgary-Mountain View, followed by Calgary-Buffalo. MR. HAWKESWORTH: Thank you, Mr. Speaker. Our previ ous discussion in this Assembly had to do with in which ways would questions be ruled in order or out of order during ques tion period. It didn't get to the substance of this issue, which has to do with the liability of the provincial government in this matter and what action it proposes to take and what remedies

November 23, 1987 ALBERTA HANSARD 1997 people have available to them to determine whether there is a liability at all from the provincial government, and these are ur gent questions, Mr. Speaker. We need to have some kind of a commitment from the provincial government as to how people can seek remedy and find remedy. Apparently, some members of the government opposite appear to believe that the Code inquiry is going to deal with that, when all the evidence is to the contrary.

There's a lot of reliance being laid on the Ombudsman's review of this mat ter, but nowhere is there indication that the provincial govern ment will accept recommendations from the Ombudsman. There's no indication that the Ombudsman will even be able to determine the liability of the government. There could be anywhere between 20,000 and 30,000 Al bertans who have some potential claims.

Are they going to have to individually pursue these through the courts to protect their interests, or will the government give an undertaking today or through the course of a debate that their interests will be pro tected without having to pursue them at great cost and expense through the court system? Virtually 20,000 to 30,000 individual cases would in effect paralyze the court system within the prov ince of Alberta. We need, Mr. Speaker, to know under what circumstances the government will agree that it has a liability without forcing contract holders and others to resolve the matter through the courts.

It's my belief that a debate on this matter this afternoon would provide the opportunity to explore these issues and for the provincial government to make a clear and unequivocable statement in these regards. Thank you, Mr. Speaker. MR. SPEAKER: Calgary-Buffalo. MR. CHUMIR: Thank you, Mr. Speaker. I rise to support the urgency of this motion, and particularly with respect to the as pect relating to the need for a public inquiry. It's vital that there be a thorough investigation of the whole affair and in particular the role and responsibility of the government.

Instead of that, we have a current process which is an inadequate mess. It's complex, confusing, and incomplete, and it's totally inexcusable when one simple public inquiry could have done the job so very easily. At the present time we have the Code inquiry and the Ombudsman's review, and there are many serious problems with these processes. Firstly, under the Code terms of reference the inquiry cannot review the government's responsibility nor can it accord blame or make findings with respect to government. The Ombudsman . . . MR. SPEAKER: With respect, hon. member, back to urgency, please; urgency of debate.

MR. CHUMIR: It is a reflection of urgency, because if this were not the case, there wouldn't be any urgency with respect to this issue. This is background material, Mr. Speaker, and I'd certainly like to get myself on record on something that is so patently clear to anybody who has been following the proceed ings in detail, as I have. The Ombudsman himself pointed out most clearly in his let ter of October 16 to the Provincial Treasurer, which has been made public, the reality that the Code inquiry does not have the full scope claimed by the government.

I quote from that letter on page 2, where he states: It is my suggestion that you consider taking whatever steps are available to you to expand the ambit of the inquiry to clearly include the involvement of Government within the mandate of Mr. Code, so that a public determination might be made on the evidence that will be brought before the public during his investigation. That's the Ombudsman's suggestion, not that of the opposition in this House. The second defect is that there is no process now to review the collapse of Principal Group Ltd, Mr.

Code has jurisdiction with respect to First Investors and Associated Investors corpora tions. Mr. Justice Berger recently refused to expand the ambit of the Code inquiry to include Principal Group. Therefore, there is no direct mandate at present with respect to a review of the Principal Group, and it and the investors are left in no-man's- land or no-woman's-land. Thirdly, while the Ombudsman has indicated that he will review the role of government, I would submit that having a separate investigation for the government's role fragments what should be a cohesive process.

Indeed, notwithstanding his stated intention to the contrary, what he finds may never be dis closed, since he acts in private. Meanwhile, Mr. Code, who may be seeing a great deal of what is happening, through his power -- and we must separate the power of whom he can call to give evidence from the mandate of what he can investigate, and he does have the authority to call cabinet ministers but then not to investigate the role of the government -- is hampered by his mandate from reaching conclusions and making findings with respect to the government. This is totally unacceptable, Mr.

Speaker, when his mandate could be so easily expanded under the Public Inquiries Act. So time is passing; Mr. Code will soon be hearing govern ment witnesses. He needs immediate instructions if he is to refocus his thinking and to delve directly into the role of govern ment in this matter. The opportunity will be lost if we don't act now, and I urge the House to give unanimous consent to this urgent and pressing matter. MR. MITCHELL: Mr. Speaker, I would like to join my col leagues in emphasizing the urgency of the motion that has been presented by the Member for Edmonton-Strathcona.

I would simply like to state briefly that I see three particular reasons why it is urgent to debate the Principal Group matter in full in this Legislature. The most important reason for doing that, the reason that brings with it the greatest sense of urgency, is the reason that addresses the human, personal, individual implications of this matter. People have lost money, and many of them need that money urgently. Many of them need it to cover monthly ex penses. Many of them have set money aside and anticipated it for single lump sum payments at some time in the future, which were payments urgently required.

They have at this point one significant resource for compensation. On June 30 they prob ably had two significant recourses for compensation. One was the Principal group of companies, the remaining companies, which had value and which were earning income and which, had the dissolution been handled more appropriately, would have existed today to supplement the losses of investors in First and Associated. MR. SPEAKER: Careful, hon. member, in voicing opinions. MR. MITCHELL: I understand. Yes. The second and only remaining significant source of funds at this time is compensation from the government, and as at one

1998 ALBERTA HANSARD November 23, 1987 time had been clearly stated by the Premier and perhaps lately not so clearly stated but still remains a possibility, the govern ment has made a commitment that should it be proven negligent in the regulation of Principal Group and its subsidiaries, then the government would be prepared to compensate losses of inves tors due to that negligence.

To the extent that the compensation of those losses is urgent, significant, and important at an individual human level, it is ur gent, significant, and important that we discuss the govern ment's negligence or lack of negligence at this time as quickly as possible to find that remedy, to pursue that possible remedy to its conclusion as soon as possible on behalf of investors.

Secondly, there is a sense of urgency in coming to conclu sions about the government's role in the Principal Group affair; one, because there is some doubt whether we will be able to do that under the current structure of investigations, but secondly, because this government, which has presided over the demise of Alberta's traditional financial industry, largely, continues to regulate what is left of it.

It is important that we therefore quickly and as efficiently as possible move to review general government practice in the financial industry so that steps can be taken to ensure that further problems are not created or, in fact, diverted. MR. YOUNG: Mr. Speaker, a point of order. MR. SPEAKER: A point of order. MR. YOUNG: Mr. Speaker, the issue is the urgency of this de bate and not a review of a general nature of the financial regula tion or institutions of the province. I would request, Mr. Speaker, that the hon. member should come to that point of ur gency, if he has one. MR.

SPEAKER: The point of order actually is well taken, hon. Member for Edmonton-Meadowlark, that there has been indeed a considerable amount of latitude as compared from even the points made by the Member for Edmonton-Strathcona, who made the original request for urgency. If there are any final comments with regard to urgency, please continue. MR. MITCHELL: Thank you very much, Mr. Speaker. You have been patient. I believe that it does apply, that we have the same regulators, the same minister, reviewing and regulating financial firms at this time.

It is urgent that we find out what they did or did not do, did properly or did not do properly with respect to Principal Group. To the extent that there are doubts about whether we will find that under the current investigatory structure, it is ex tremely important that we have the chance to debate that specifi cally in this Legislature as soon as possible. Finally, there is still the question of implications for this final failure, this latest failure, implications for investor confidence both within Alberta and outside of Alberta, confidence in invest ing in Alberta. There is an urgency in our economy.

It's an ur gency that is addressed once again by the failure of Principal Group, and again it heightens the need to pass this motion. MR. SPEAKER: The Chair is of the opinion that sufficient dis cussion has taken place with respect to urgency. A number of points have been raised, especially without getting around to whether or not sub judice convention applies. Some comments have been made with respect to the scope of the Code inquiry. One comment should be made with regard to a statement made by the Member for Calgary-Buffalo. For the information of the House, by court order Mr.

Code is assessing all assets, liabilities, and related directorships; Principal's assets include all affiliated companies of Principal Group. The Chair regrets that the member is not present in the House at the mo ment, but I'm sure he will be informed by his colleagues and by reading Hansard. The Chair has to assess the matter with respect to the word "urgency." The Chair also notes and thanks the Member for Edmonton-Strathcona, who indeed did conform with the re quirements of Standing Order 30(1) that written notice was given at least two hours' prior to the sitting of the Assembly.

Nevertheless, Standing Order 30(2) now comes into play. But now having listened carefully to the comments of hon. mem bers, the Chair then must rule whether or not the request is in order, and having to look not at the issue but at the arguments with respect to that one word "urgency," the Chair has not been convinced of the matter of urgency, due primarily to the fact that two inquiries have been in place for some length of time. The Chair recognizes the Member for Edmonton-Gold Bar. head: Request for Emergency Debate MRS. HEWES: Thank you, Mr. Speaker. I, too, rise to present a motion under

section 30, and request the similar opportunity to adjourn ordinary business of the Assembly to discuss another matter of urgent business. The motion, Mr. Speaker, is that the Legislative Assembly urge the government to establish a program to provide interest- free loans to Alberta investors in FIC, AIC, and Principal Group Ltd. who establish a need for such loans, since many Alberta investors in Associated Investors and First Investors and the Principal Group are dependent on the amounts invested with these companies for living and other expenses. Mr. Speaker, may I speak to the urgency of that matter? MR.

SPEAKER: Please. MRS. HEWES: Thanks, Mr. Speaker. I commented before, in regard to the motion from the hon. Member for Edmonton- Strathcona, on the numbers of people that have approached each one of us during the last few months and on my understanding of the kinds of circumstances that the vast majority of those peo ple are in as a result of these particular failures. There's no question that while they were sophisticated investors and be lieved and understood that their investment was -- they under stood for the most part that it was not insured but that in fact it was guaranteed.

Now they are in a position where their income, their monthly income, is threatened. Their monthly income has . . . MR. RUSSELL: Mr. Speaker, on a point of order. I wonder if I could ask a question. It appears that the notice of motion that was delivered to us asks for a decision of the Assembly, which is prohibited under our standing rules under emergency debate,

section 30(6). I'd ask for your ruling on that, please. MR. SPEAKER: The Minister of Advanced Education is in deed correct that when one reads the Standing Orders of the As sembly with respect to emergency debate it does indeed become a matter of debate on an issue. Now, the hon. Member for Edmonton-Gold Bar has supplied a motion as a focus for the

November 23, 1987 ALBERTA HANSARD 1999 issue. However, if you go further in Standing Orders, as the Minister of Advanced Education has pointed out, if indeed in this hypothetical situation the Assembly did go forward to ac cept this as an emergency debate, if, reading further yet again in Standing Orders, there's no resolution of the issue, it's a matter for debate. So that careful reading of Standing Orders is indeed accurate, hon. Member for Calgary-Elbow.

Nevertheless, the Chair will allow the Member for Edmonton-Gold Bar to proceed with respect to the issue, but again as it was undertaken previ ously with the Member for Edmonton-Strathcona. Nevertheless, the member must truly speak to the urgency, please, so that the House can indeed get about its normal business. MRS. HEWES: Thank you, Mr. Speaker. Then let me very briefly again reiterate the urgency that's coming to each one of us, because people have been deprived of regular income as a result of these actions.

These people have indicated to many of us their dependence, if not entirely then in great measure, on the income. Most of them are people having acquired their savings in midyears, and many of them are pensioners as well, are single people, are retired people attempting to prepare for their future. Mr. Speaker, people have indicated to me that in those kinds of straitened circumstances, with the sort of proposal that is in place, with the inquiries that are going on, there is no confidence that this will be resolved in short order.

So they now find them selves in very difficult circumstances and may in fact have to turn to the province for assistance in order to make up the differ ence or may have to change in gross measure their life-style. And I don't think that's what any of us would intend. I'm sug gesting that what we could and should be looking at here is es tablishing a program that would allow them to continue until the matter of the inquiry has been resolved. Mr. Speaker, the ur gency is there. If you have been deprived of your income and if it is very limited in the first place, Mr.

Minister, you too would know what that feels like. Perhaps, Mr. Speaker, the minister is not listening to the constituents that come to his office. I'm sure they are there as well as they are in mine. MR. SPEAKER: Speaking to the matter of urgency, the Chair recognizes Edmonton-Kingsway, followed by the Minister of the Environment. MR. McEACHERN: Thank you, Mr. Speaker. I will be brief. This particular problem developed over many years, and the process that is set in place will take a considerable length of time to bring a resolution, however unsatisfactory.

For many seniors, time is not something they have a lot of. Many of them have put their life savings into this company and have got back only 30 percent at this stage. We've suggested an alternative: for the government to put in another 35 percent and take them at least off the economic hook at this stage. Then perhaps they could wait till at least the Code inquiry was over to see if the government would do something about the final 35 percent. But these people cannot sit back the two or three years or five or six years that it may take to bring a court case.

The Code inquiry may get to the bottom of what happened, but it has no right to make any formal announcements or judgments about what should be done about it. So the people involved will be left with having to try to bring a court case which may drag on for years, and, Mr. Speaker, the people just do not have the time to wait for that kind of solution. MR. SPEAKER: The Minister of the Environment. MR. KOWALSKI: Thank you very much, Mr. Speaker.

There is no doubt in my mind that individuals who might be listening to this debate would rightfully probably arrive at some degree of confusion with respect to certain words that have been used. I

Document details

Collection	Alberta — Debates (Hansard)
Citation	19871123
Type	hansard
Volume / chapter	L21 S2 19871123 1430 01 han.pdf
Language	en
Format	json
Source	PROVINCIAL
Identifier	1f41cf52b9f00e92905c76e9d6cec53379d9ec83

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